Infosys – an Introduction and Viewpoints Global Infotech Forum University of Illinois

at Urbana-Champaign 06 Sep 2007

CONFIDENTIAL

© 2007 Infosys Technologies Ltd. Strictly private and confidential. No part of this document should be reproduced or distributed without the prior permission of Infosys Technologies Ltd.

Infosys today is a global leader in the “next generation” of IT and Consulting

• Named India’s Most Respected Company in the Businessworld 2006 survey for the fourth consecutive time • Adjudged “India’s Best Managed Company” in a study conducted by Business Today and A.T. Kearney • Forbes: “Infosys is a role model for companies everywhere in financial transparency.” • “Dream company to work for” in India and amongst the “100 best places to work for in IT” in the US • Amongst the first companies in world to be certified at CMMI Level 5 • BusinessWeek: Amongst the top 3 IT Services companies in the world • Wired rated Infosys among its top 40 companies that have reshaped the global economy.

Exceptional Financial Performance Increase in number of Active Clients Strong Growth in Employees

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Offshore Outsourcing is a Global Mega Trend

Offshore Outsourcing Rationale

• Deliver high quality at great value • Highly scalable with a large resource pool available • Proven track record

Offshore Addressable Market is Increasing Global 500 and Fortune 1000 IT Spending

• • Trend setters for the rest of the business world • Combined IT spend represents 40% of the global IT spending • IT budget constitutes 2.3% of $20 trillion combined revenues

Infosys Market Positioning Consulting GDM+ Consulting Onsite Firms GDM+

(present) (~1990s) Source: IDC 2005, 2006; Deutsche Bank Securities (~1980s)

ADM Non-GDM GDM

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Offshoring has gone beyond providing cost saving or strategic sourcing – it has become a competitive necessity

“The board of directors of virtually every big company are now insisting on very articulated outsourcing strategy” – Businessweek, 2006 “Don’t tell me how much I can save. Show me how we can grow by 40% without increasing our capacity in the US” – Client executive, Jan 2006

• • • • •

Global Sourcing Key Trends

Global sourcing is becoming a

core component of F500 companies’ corporate strategy

The scope is expanding beyond traditional ITO or transaction processing to

Centers of Excellence

or Specialized Skills Companies are using global sourcing as a means to position themselves for long-term

capability building

(both skills and capacity) Global sourcing has become a

competitive necessity

The new frontier is to

integrate process and IT operations

to improve effectiveness and efficiency

Cisco wants to raise revenue productivity to $1M per employee by enhancing operational effectiveness and focusing employees on value-adding activities -- John Chambers, CEO Cisco Systems This isn’t about labor cost…the issue is that if you don’t do it you won’t survive – MD of Deutsche Bank Global Business, Jan 2006

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There are 3 strong business drivers for this rapid growth in Outsourcing – (1) Reduce Costs, (2) Build Competencies and (3) Increase Revenue

Key Cost Related Drivers Reduce operating costs Reduce capital investment Turn fixed costs into variable costs Meet downsizing requirements Reduce development costs Obtain intelligence of competitiveness 29% 38% 35% 58% 81% 89% 81% Key Competency Related Drivers Focus on core business Gain access to technology not in company Gain access to needed skills Provide alternative to building capability Create additional capacity Provide backup capabilities Align with policy/philosophy/culture Key Revenue Related Drivers Increase flexibility and responsiveness Increase speed to market Improve quality Reduce customer response time Grow revenue Gain access to markets 0%

Source: AT Kearney, Outsourcing Strategically for Sustainable Competitive Advantage, 2005 Confidential 5

18% 34% 42% 55% 60% 52% 60% 42% 46% 40% 38% 20% 22% 40% 60% Percent of Respondents 80% 100%

Market Environment – Insurance, Healthcare & Life Sciences (IHL)

IT Spending in US (2006, in bn USD)

5.5

16 20 15 * Inf osys analysis on research f rom Celent & Gart ner Lif e Insurance P&C Insurance Healt hcare Lif e Sciences •

Worldwide technology and related services spending is on the rise growing at 7% CAGR over 2006-2010 as against 5% in previous yr

•

IT spend across IHL is ~ 50 Billion USD. Current Infosys share of IT budgets of the existing accounts is in the range of 2 - 3%.

•

There is a risk of downward trend in US economy because of sub-prime crisis along with concerns of appreciating Indian currency vis à-vis USD.

•

Consolidation through M&A across all sub-verticals.

•

Increasing Demand for Transformational opportunities (Consulting + ADM)

•

Need for strong domain/technology capabilities to deliver integrated services / solution offerings

•

High Attrition & low recruitment at onsite & tier 1 locations specially senior Software Engineers/Programmer Analysts

•

Rate Pressure and rising costs of operation

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Key Industry Trends in Insurance, Healthcare & Life Sciences

Insurance Healthcare Life Sciences

• IT spend across IHL is ~ 50 Billion USD • Gartner projects Insurance IT spending in North America to reach $57.6 bn in 2010 with a CAGR (2005-2010) of 4.5% • Clients with operations across Europe & Asia Pacific - Integration • Several large deal contracts expiring in Insurance industry between 2008 and 2010 with a cumulative Total Cost Value (TCV) of over 10 bn USD • Larger scale BPO & Packaged Application Sourcing • Gartner projects Healthcare provider IT spending in North America to reach $34.6 billion by 2011 with a CAGR (2006-2011) of 5.2%.

•Steady growth in Consumer Directed Healthcare market and regulations • Increasing trend towards Service Oriented Architecture (SOA) based applications  Significant growth in outsourcing in Life Sciences  Offshoring of Enterprise Solutions work (SAP & CRM) in Life Sciences  Outsourced R&D spending by the Life sciences industry to touch $26bn by 2010 up from about $14bn in 2005  According to Frost & Sullivan, IT spending in Life sciences expected to touch $50 bn by 2011 7 Confidential

Thank You

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